LIU XIAN FENG SAM AND ANOTHER v. LIU BO AND OTHERS

HCA5474/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.5474 OF 2001

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D E C I S I O N

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1.  There are two applications before me today following on my decision on 8 March 2005 in discharging the Mareva Injunction and ordering a re-grant on terms. 

2.  The first application relates to the terms of the order. Fortunately the parties have agreed to that and I need not deal with it now, save that the draft consent order will be submitted for approval in due course.

3.  The second is the argument on the costs nisi.  I have made an order nisi that the 1st and 2nd plaintiff pay the costs of the application to set aside the Mareva Injunction.  Mr Kwong for the defendants said that order nisi should be made absolute. 

4.  On the other hand, Mr Chain for the plaintiffs argued that the order nisi should be varied to the extent that the costs should be paid in any event and not forthwith.  Mr Chain referred to the fact that the plaintiff had obtained a re-grant of the Mareva Injunction enjoining funds now standing in the accounts of the defendant, and the 1st defendant had filed an affidavit that he was of no means whereby he obtained from the court an order for legal expenses up to the trial of this matter to be paid out of the enjoined funds.  Mr Chain submitted that in the event that the plaintiffs were to succeed and the defendant were to lose, in theory, the defendant would have to reimburse the legal expenses which they have spent out of the funds enjoined.  But in practice, because of the stated impecuniosity of the defendant, it would most likely be that the plaintiff would take no further action on the matter.  So if the costs order were to be taxed forthwith instead of in any event and being available for set-off against each other, the plaintiffs would be in double jeopardy in the sense that they would have to pay now and not recover later. 

5.  In reply, Mr Kwong submitted that the discharge was brought about by blunders made by the plaintiffs, and they should bear the consequence of having to pay the costs forthwith. 

6.  I have looked into the facts, albeit at a prima facie level.  Suffice it to say that granted there were material non-disclosure on the part of the plaintiffs which led to the Mareva Injunction obtained being discharged, I saw fit that justice required that it should be re-granted on terms.  The defendants are so to speak obtaining legal expenses “on credit” in the event they were to lose.  The “debit” side should be treated pari passu.  In such circumstances, I accede to the argument of Mr Chain.  I make an order that the costs be paid by the 1st and 2nd plaintiffs in any event.